SEC Chairman Gary Gensler announced the news on the Commission's official website, confirming that applications from eleven companies including Grayscale, BlackRock, Valkyrie, and others have been approved. These ETFs will be available for trading on major exchanges such as the New York Stock Exchange (NYSE), Nasdaq, and the Chicago Board Options Exchange (CBOE).
This approval is a major turnaround from previous rejections, as the SEC had rejected over 20 applications for spot Bitcoin ETFs between 2018 and March 2023. One of the rejected proposals from Grayscale was even brought to court, and the Court of Appeals ruled in favor of Grayscale, stating that the SEC had not adequately explained the reasons for disapproving the application.
“Given these circumstances, I believe that the most correct path would be to approve the listing and trading of units of spot Bitcoin ETP,” Gensler explained.
It’s important to note that the SEC’s decision specifically refers to ETPs (exchange-traded products), of which ETFs are a specific type. The approval allows for the listing and trading of shares of investment funds related to Bitcoin, enabling investors to gain exposure to Bitcoin without directly owning the cryptocurrency.
“It is important to note: the Commission’s actions in no way signal a willingness to approve listing standards for crypto assets that are securities. The approval also does not mean that the Commission condones the failure of some cryptoasset market participants to comply with federal securities laws… The vast majority of cryptoassets are investment contracts and are therefore subject to securities laws,” emphasized the SEC chief.
The trading of Bitcoin ETF shares will only be permitted on regulated stock exchanges, with the Commission explicitly stating that trading on other exchanges or through unregulated intermediaries is not approved.
“I would point out that underlying assets like metals ETPs have consumer and industrial utility. While Bitcoin, on the contrary, is primarily a speculative, volatile asset. Which is also used for illegal activities including extortion and money laundering, sanctions evasion and terrorist financing. — Gary Gensler considered it necessary to stipulate. “While we today approved the listing and trading of certain spot Bitcoin ETP units, we did not and do not approve of Bitcoin itself.”
Prior to the official announcement, a document containing the SEC’s decision appeared on the agency’s website, although it was briefly inaccessible due to a technical issue. This incident mirrored a previous unauthorized tweet about the approval of a Bitcoin ETF from the SEC’s X account, which was later removed by the Commission.
In the lead-up to the SEC decision, the crypto market had been flooded with predictions about Bitcoin’s price and performance. Some experts were optimistic, forecasting a surge in Bitcoin’s value, while others warned about the risks associated with investing in cryptocurrencies.